Tuesday, July 16, 2024

A Helpful Guide to Health Insurance

If you’ve never bought health insurance or been on a health insurance scheme, all the available options may seem overwhelming. Still, being on a health insurance plan is essential since there is no free healthcare and medical care is expensive. 

Understanding the Terms Insurance and Healthcare Providers Use

Before looking at the various healthcare plans, you must understand the terms used, as this will help you to know what is offered and who is responsible for what payments. Common terms include:


The coinsurance is usually calculated as a percentage, and it is the amount you have to pay towards a medical bill after you have reached the deductible.

For example, your annual deductible is $1000, and your coinsurance is 20%. You reach your deductible amount in April, so going forward, the insurance company will pay 80% of your medical bills while you cover 20%.


A co-payment is a fixed amount you pay every time you visit a doctor or fill a prescription. For example, if your copay amount is $50 and the doctor’s bill is $250, your insurance company will pay $200, and you will have to pay $50.


A deductible is an amount you must pay for medical services and medication annually before the insurance company pays. For example, if your deductible amount is $1000 for the year, you will have to pay all your bills and medical expenses until you reach this amount. 

After you’ve contributed $1000 to your medical expenses, your health insurance will start covering the bills. However, you will still be responsible for coinsurance and co-payments.

Depending on your plan, your insurance company might cover the costs of some medical bills, like preventive care and vaccines, before you reach your deductible.  Other providers offer no-deductible health insurance plans.

Flexible Spending Account

An FSA (flexible spending account) is a tax-advantaged account linked to your employer. The employer and employee may both contribute to this account.

Money from this account can be used for any out-of-pocket medical expenses. Depending on the plan, either any funds not used will expire, must be used within two and a half months of the next year, or a limit of $500 may be rolled over to the following year.

Health Savings Account

A health savings account (HSA) is an account created specifically to save money for medical expenses and is tax-advantaged. This account is ideal for self-employed people as the individual controls it. Any funds not used can be rolled over to the following year.

There is a maximum amount you’re permitted to contribute to the account, usually $3350. When you contribute to this account, your tax bill will be reduced, and your withdrawals from this account will also be tax-free. 

You may use funds from this account to pay for qualified medical expenses like vision, dental care, and prescription drugs. 


An out-of-pocket expense is any amount that you have to pay for yourself. This can be the deductible, coinsurance, co-payment, or any medical cost your insurance does not cover.


The amount you pay to be a member of a health insurance plan is called a premium. If your company sponsors your health insurance, your employer will pay a percentage of the cost. 

What to Consider When Shopping for Health Insurance

Since there are many different plan types available, you must evaluate them carefully and consider your needs. Knowing what you will most likely require cover for and what your chosen plan covers can save you from unexpected expenses.

It is always best to buy health insurance when you are young, as medical emergencies can happen at any age. Also, the cost of premiums becomes more expensive as you get older. 

Price of the Policies

The price of health insurance varies depending on the plan you choose and what it covers. Factors like your age, where you live, income level, type of community you live in, and lifestyle choices like smoking will affect the price of your premiums.

Some companies may sponsor health insurance for their employees. The employer may cover 100% of the premium costs or offer partial cover, and the employee will be responsible for the balance. 

While you may want to save on the cost of your monthly premiums, this isn’t very cost-effective in the long run as plans with cheaper monthly premiums typically carry higher deductibles. 

Claim Process Difficulty 

Look for insurance companies that have quick and easy claims processes. The last thing you want is to join a health insurance plan where the claims process is complicated, complex, and lengthy. Ideally, join a program that will pay your claim quickly and provides excellent customer service. 

Healthcare Network

Each insurance company may specify the healthcare providers that you can visit. If you go to a healthcare provider out of your healthcare plan’s network, your insurance company will not pay the bill.

Ideally, look for an insurance provider with an extensive network or that includes healthcare providers in your area. 

Flex Cards

You may want to get a flex card if you’re over sixty-five. Private health insurance companies offer Flex cards and are typically targeted at seniors on Medicare. Flex cards for seniors are debit cards with money loaded on them that can be used to pay for certain medical expenses, like dental or vision care, visiting a specialist, or co-payments, depending on your plan. 


Since most health insurance plans don’t cover all medical expenses, you may want to buy Medigap, which will cover you for out-of-pocket expenses not covered under your primary plan.

Like health insurance, Medigap covers differ, so you must go through the different Medigap offers to find one that suits you. Common things Medigap will pay include lab work, co-payments, and deductibles. 

Types of Plans Offered By Health Insurance Providers

The two main types of healthcare are private and public. Both can be further broken down into different types. 

Public Health Insurance

The state subsidizes public healthcare, but it is not free. It is designed to give people from low-income backgrounds who cannot afford private health insurance access to healthcare. 

This type of health insurance is more affordable, and depending on your age; you can qualify for one of the following:


The Children’s Health Insurance Program covers children under eighteen from low-income communities. 


Medicaid provides medical care to adults from low-income communities. This plan covers medical and long-term care. 


Medicare is for seniors who are sixty-five and older. Different policies are available under this plan to suit patients’ individual needs. Whether you opt for Medicare or private health insurance likely depends on your age and health needs.

Private Health Insurance

Every health insurance plan offered by a private insurance company and not funded by the government is classified as private health insurance. Your employer may sponsor these plans, and there are various policies on offer that can be tailored to suit your medical needs.  

Author Bio

Aubrey Moore is a freelance writer and home renovation enthusiast living in New York City. She keeps up to date with the newest trends and then passes this knowledge on to her audience. When Aubrey isn’t researching and writing, she is out playing volleyball with her friends.


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